The Death of the Labor Market: An Interview with David de Ugarte

David de Ugarte is a young economist, technologist, and entrepreneur committed to new models of economic democracy. In 1989, amidst the upheaval and turmoil resulting from the fall of the Berlin Wall, he founded the Spanish cyberpunk movement (1989-2007) with the intention of opposing large corporations’ increasing concentration of news media. Later, in 2002 he founded Piensa en Red [Think in Networks], the first company inspired by this movement. The dynamic de Ugarte went on to create Sociedad Cooperativa de las Indias Electrónicas (2002) and the Grupo Cooperativo de las Indias, which is responsible for the development of new projects. He is also the author of essays such as ’11M: redes para ganar una guerra [11M: Networks to Win a War]’, and of books of fiction and novels for mobile devices such as ‘Días de frontera [Frontier days]‘. His books are available in the Library of Las Indias, and they are the first collection of contemporary essays to be in the Public Domain. We met backstage at last year’s OuiShare Fest, the biggest event about the sharing economy in Europe, bringing together a thousand entrepreneurs, researchers, and supporters of the collaborative economy.

The cooperative group of Las Indias defines itself as “a transnational network dedicated to creating knowledge, networks, products and services empowering individuals, communities and organizations with innovative tools to enhance the sustainability and resilience of their projects.” How is the cooperative organized?

Las Indias is not a big project and we want it to stay that way for two reasons: as technology improves, the optimal size for a business improves accordingly. This is great news because democracy in a company then becomes really viable on a small scale. We wanted to show that by the fact of being smaller we could exemplify a stronger internal democracy and have a truly living spirit of cooperativism. The problem is that companies have a perverse tendency towards growth. We solve this by splitting ourselves up. When someone comes to Las Indias and has spent some time with us training to provide consulting services to clients – an average of two or three years – they then have to find members for their own cooperative, which can in turn become part of the group. The cooperative must be organized around a small community and be able to coordinate with the others. This is the model of Las Indias, which must necessarily be organized into small companies, which then work with each other as a confederation. The second hallmark of Las Indias is global reach because peers can be found anywhere in the world. We cooperate with peers through conversation, and as we work in Spanish, we have plenty of contact with Latin America. I believe that the happier we are, the better we work, so that’s why each cooperative in our network has no more than 20 members. In this way we maintain a non-hierarchical organization and each person can better develop their own passion.

What types of companies work with Las Indias?

All kinds of businesses. We have been consulting on cooperative and social innovation and also business innovation for 12 years now, helping companies become more international, incorporating the concept of the Commons into the business, helping them transform towards greater democracy, etc. On the other hand, the companies that make up Las Indias are very diverse. Some are producing free software, there are Fab Labs, companies making organic beer…

I understand that these cooperatives are reliant on the use of the Internet

Yes, but the technological aspect is purely functional. Technology is not the most important thing any more. The same thing happens when you’ve just got your own place; your first pressure cooker is a big deal and you cook everything with it. Not that you’re using it that much for yourself as such; it’s more to get the most out of your new toy. But then one day you feel like making some gazpacho and the pressure cooker isn’t working that well so you start to think less in terms of technology and more in terms of your actual needs. The important thing is to concentrate on the problem itself that you want to solve – because very often when thinking up solutions from a purely technological point of view you end up making the wrong choice. That’s why we consider technology more as a tool; in that our approach does not necessarily have to be technological, it only has to be pragmatic.

What opportunities does Peer to Peer (P2P) production present?

Many opportunities. Small scale industry forms a part of larger chains of production, in which these smaller companies provide parts to the larger ones, for example in the case of the suppliers of Seat. Large companies take for granted that their suppliers will be constantly incorporating new technologies into their workflow to allow them to make new parts and as soon as they are no longer able to do this, they can’t survive as a going concern. This is the reason why companies in the automotive sector are dropping like flies. If Seat was going out of business itself, it would be on the news, but as those who are closing are just small workshops of 20-50 workers, it’s not worth a mention. Recently many workshops have emerged producing cars using open designs; that is to say: freely available and unpatented. This form of production could help re-industrialize a sector that is being destroyed. It’s mainly a question of intellectual capital: when you stop working for four years you lose a great many skills; and we’re six years into the economic crisis now. When the hope of a generation has been reduced to getting a three month contract, it stunts their vision of how to build a career, build a life for themselves. I have interviewed many people round about their thirties who have only ever been offered contracts of a few months’ duration. You can’t turn thirty and still be living that way, because you’re going to come to the conclusion that everything in life has to be short-term.

David de Ugarte at OuishareFest

Peer production empowers us and allows us to create our own business.

Yes, but before starting your own business, which is often a leap into the unknown, and normally turns out badly if done out of desperation, there is an initial period that has to do with one’s own identity and one’s own inner certainty that one is able to do a particular thing. Formerly, this confidence was garnered by working for years at the same job, but now this has been lost due to a general lack of employment; more than 50% of young people are unemployed at the moment in Spain. The trend towards Fab Labs and free/libre software, or Open Source Ecology will allow you a much more transformative, empowering and enriching learning experience than a university could ever give you, because you’re working with other people and learning at the sharp end, technologically speaking; plus you’re given the opportunity to make your own decisions. This is hard to find in the market due to its inherently hierarchical structure. The experience of peer production creates wealth in the social sense, and this kind of work is enabling young people to develop their potential and their enthusiasm. In the future the labor market as we know it will cease to exist, so we need to acknowledge that peer-to-peer creation is not only a generator of this great social wealth, but it’s also the only place right now where new generations are really developing their potential.

Futhermore, it allows people to act, to directly influence the needs of their community…

Over the past 20 years, the existence of common spaces, places of social debate and pretty much everything involving citizenship has been erased in a conscious and ideologically-directed manner. The citizens are not the Members of Parliament, as the market is not only represneted by the numbers in the Stock Exchange. The Roman Forum in Tarragona, which used to be the largest in the Iberian peninsula, was also the place of public life, the market, and where the philosophers would meet. Nowadays, the market and social life are divided. In the middle of each village there is a square because this used to be the space for democracy in the Middle Ages. In Spain there is a big tradition around the squares, starting with the revolution of the commoners. The passage of the last 20 years has seen the destruction of spaces where social communication can happen, and the market has is now separated from public life and has passed to being the business of a few suit-and-tie executives who handle exorbitant amounts of money. Now we are rediscovering the importance of cooperation within the community.

Ecuador is the first country in the world that is working on a transition to an economy based on the common good, with the FLOK Society project, supported by the government of Rafael Correa.

The model of the commons has become attractive to Latin American countries such as Ecuador, where the state is not able to generate a welfare state due to its lack of financial capacity. I think there will be a convergence between models as the FLOK Society, arising in a State that has no ability to expand and create social cohesion, and therefore is seeking community cooperation, using technology to create a more cohesive society. What I think we need to do in Europe, where the state is gradually abandoning parts of the society, is to give power back to the communities because the idea of the State we used to have is vanishing. The administrations in Europe are too big, and therefore less controllable by the citizens and more easily manipulated by big corporations. We have to aim at a political model based on smaller organizations, more controllable by the people – without losing the closeness and connection of the European Union – and it should also allow mechanisms of direct democracy.

Do you consider that there is a connection between the collaborative economy and the social movements that have emerged in the last few years?

I think the interest that the collaborative economy is awakening is a response to the search for alternative business models and markets, and I believe that many of us are sick and tired of capitalism. But it has to be noted that the world of the existing collaborative economy has a divided soul: one side has much to do with P2P, the communal and the free software community that are by no means in the majority. But then there is another part, which is the world of startups and the infamous ‘bubble’. Go outside (in the OuiShare Fest) and ask how many companies have openly released their software. Ask how many are horizontally and democratically organized internally. Ask how many have a policy of Corporate Social Responsibility (CSR). Ask for their statistics about gender in their internal organization. Companies that come from the world of startups are traditional companies; they are basically wolves in sheep’s clothing.

Airbnb is leading the movement and is a purely capitalist enterprise, although it definitely has a strong social aspect. Should we distinguish between commercial companies and non-profit companies?

I am not against companies making money, but one has to focus on two things: was it necessary for them to act as mediators? I mean home swapping existed before today; many families were making an extra income out of it. The second issue is that if Airbnb earns 300 or 500 million, does my community benefit from this? I don’t necessarily think companies should be non-profit businesses. But if Airbnb was a cooperative under the Spanish law, almost 30% of its revenue would go to social action. But if Airbnb was on the Stock Exchange and the capital was divided between retirees who have two shares in the company each, then I say Amen to that, because then the more money Airbnb makes, the more social cohesion it generates. However, if Airbnb belongs to investment funds intent on speculation, we have a problem. Property is very important, and I say that as a defender of cooperatives. The collaborative economy is the new bubble. Half of the so-called collaborative economy businesses, which receive millions in investments, are just middlemen – although the original goal of the collaborative economy was exactly the contrary.

A member of a cooperative told me that what this model is lacking are cooperatives

The cooperative model is the key. It does not mean that everything outside that model is necessarily bad. There have been interesting experiments around the concept of stakeholders, which are the social interests around the council of companies. At the end of the day, the most important things in a business are its property and what it is aiming at overall. The problem with cooperatives is that they are a bit obsolete already. For example, some large ones like Mondragón, because of its structure, are facing the same problems as large companies do, and they have lost a lot of internal involvement and democratic control. The sharing economy needs the cooperative model as a counterbalance, because if not, it will end up devoured by the investment funds bubble.

Do you think the movement should be politicized?

There are initiatives that are politicized, such as Guerrilla Translation. They are dedicated to translating people who are writing in languages other than English so that the conversation generated effectively exists, because otherwise we have a monopoly of the English language. If your opinion is not translated it’s like it doesn’t even exist. There are many people working in the collaborative economy in Greece; people are very active and enthusiastic over there, but you don’t see them in OuiShare because they’re writing in Greek. Guerrilla Translation is a very political project. And then on the other hand you have some so-called P2P projects which are really just intermediaries.